- The euro remains stable near the three -year maximum in relation to the American dollar, supported by an appetite for a moderate risk.
- Poor data in the USA and higher hopes for Fed interest rate reductions are charged to the American dollar.
- EUR/USD maintains its positive tone with resistance of 1.1630-1.1640 and 1,1700.
EUR/USD It is practically flat on Wednesday, slightly below many years of maximum near 1.1640, last seen in November 2021, consolidating profits after almost 1.40% rally in the last two days. Moderate appetite onSpark he still rides destroyKets, despite the fragility of the weapon suspension between Israel and Iran, and maintains a secure American dollar (USD) on the rear foot.
Oil prices have risen from Tuesday’s Lows butt, remain well below the ups perceptible last week. It seems that Iranian oil and natural gas objects seem not much affected by bombing, and oil traffic by the strategic Strait of Hormuz does not seem threatened, at least for now. Relatively low oil prices are an additional support for the euro (EUR) because they facilitate inflation pressure on the euro area economy.
In the USA, on Tuesday, the chairman of the Federal Reserve (Fed) Jerome Powell repeated that the central bank is not in a hurry to lower interest rates in a six -month report on monetary policy to Congress. It seems that the pressure from the US President Donald Trump and the growing disagreement among the Fed officials did not outlined the Jastrzębie Powell’s attitude.
The market, however, bet on the reduction of the rate in September, especially after the publication of consumer confidence reads down on Tuesday. The growing fears related to employment limit the decisions of shopping for American consumers and an boost in pressure to the central bank for adopting a less restrictive monetary policy.
Powell will testify again on Wednesday, but it is unlikely to change his views. The economic calendar is gaunt on Wednesday, with modern home sales data for MYes. This isWS about investments in the Middle East will continue the vehicle driving markets.
Euro price today
The table below shows the percentage change in the euro (EUR) in relation to the main currencies. The euro was the strongest against Jen Japanese.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.06% | 0.25% | 0.11% | -0.13% | -0.35% | -0.05% | |
| EUR | 0.00% | -0.03% | 0.25% | 0.09% | -0.15% | -0.35% | -0.05% | |
| GBP | 0.06% | 0.03% | 0.26% | 0.14% | -0.10% | -0.32% | 0.01% | |
| JPy | -0.25% | -0.25% | -0.26% | -0.19% | -0.36% | -0.56% | -0.27% | |
| BOOR | -0.11% | -0.09% | -0.14% | 0.19% | -0.17% | -0.33% | -0.13% | |
| Aud | 0.13% | 0.15% | 0.10% | 0.36% | 0.17% | -0.27% | 0.11% | |
| NZD | 0.35% | 0.35% | 0.32% | 0.56% | 0.33% | 0.27% | 0.33% | |
| CHF | 0.05% | 0.05% | -0.01% | 0.27% | 0.13% | -0.11% | -0.33% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose the euro on the left column and go along the horizontal line to the American dollar, the percentage shift displayed in the field will represent the EUR (base)/USD (quote).
Daily Digest Market Movers: Risk of appetite and hopes for fed cuts. Keep USD defense
- EUR (EUR) is run by the weakness of the American dollar. American dollar indicator (DXY), which measures the value Bank note AGAinst six main startNcies, remains depressed near three -year minima, in 97.60, weighted positive moods related to the risk caused by a brittle peace agreement in the Middle East and higher hopes that the Fed will be forced to reduce interest rates, probably in September.
- The suspension of weapons between Israel and Iran announced by the US President Trump on Monday seems very brittle, but at least for now it persists. On Wednesday, feeding is an appetite for a moderate risk, maintaining the euro and considering secure assets, such as an American dollar.
- However, US intelligence reports raise doubts about the durability of the truce. According to the preliminary assessment, the American bombing on Iranian nuclear places could withdraw its program by only one or two months, and not “blurred” as Trump confirmed after the strikes. It is arduous to ensure that this modern context guarantees a long -lasting room.
- On the macroeconomic front, the euro area data revealed on Tuesday that the German IFO business climate indicator increased to 88.4 in June from 87.5 in May, slightly above expected 88.3. The business expectations indicator has also improved to 90.7 of the previous 88.9, overcoming the readings of read 90.0. However, the impact on the euro was marginal.
- In the USA, the confidence of consumer conference council has worsened in relation to expectations in June, and the index fell to 93.0 from 98.4 (up improved from 98.0) in May, instead of an boost to 100.00 forecasted by market analysts. The survey revealed the deterioration of both the current assessment of the situation and economic prospects due to increased concerns about work availability, in accordance with the report.
- These numbers did not affect the cautious position of the chairman of Fed Powell on monetary policy, who repeated that the central bank is “well prepared to wait”, as he said, it is expected that prices are rising from higher tariffs and weighs business activity.
- Investors, however, maintain plants for further reduction of the FED rates in the coming months. Data from the Fed Group CME watch show 18% chance of reducing the rate in July and 85% in September, respectively compared to 14% and 65%, last week.
EUR/USD remains positive, and for now 1,1630 limits bulls
EUR/USD He resumed his wider tendency stubborn after violating the top of the recovery channel in the last few weeks, increased by the optimism of investors after the announcement of Trump’s weapon suspension in the conflict in the Middle East.
Immediate resistance is on June 12, at 1.1630, but the breaking of trend line resistance at 1.1540 emphasizes the formation of a stubborn flag with a measured target in the area of 1,1700. This coincides with 127.2% Fibonacci Extending the rally on June 10-12.
On the other hand, the bear reaction from current levels can look for support on a broken trend line, currently around the previous resistance area 1.1535. Withdrawal to test this level is not rejected. Confirmation below this level would cancel the stubborn view and bring FourRSDAY and Monday at a low level of 1.1445 back.
FAQ central banks
Central banks have a key ticket that makes sure that there is price stability in the country or region. The economies constantly face inflation or deflation when the prices of some goods and services range. Permanent rising prices of the same goods mean inflation, constant reduced prices for the same goods mean deflation. The task of the central bank is to maintain demand in a queue by adapting its policy. In the case of the largest central banks, such as the US Federal Reserve (FED), the European Central Bank (EBC) or Bank of England (Boe), the mandate is to keep inflation nearly 2%.
The central bank has one essential tool to obtain higher or lower inflation, and this by improving the rate of comparative policy, commonly known as the interest rate. In preliminary moments, the Central Bank will issue a statement with its rules and will provide additional justification why it remains or changes (cutting or wandering). Local banks will properly adapt their savings and loan rates, which in turn will make it arduous for people to earn on savings or for companies to take loans and make investments in their companies. When the central bank significantly increases interest rates, it is called a monetary exacerbation. When it lowers its comparative indicator, it is called a cash chain.
The central bank is often politically independent. Members of the Central Bank Policy Council are passing a series of panels and interrogations before the appointment of the Polityka Council. Each member of this council often has some conviction about how the central bank should control inflation and subsequent monetary policy. Members who want very loose monetary policy, with low rates and inexpensive loans, in order to significantly boost the economy, while being satisfied to see inflation slightly above 2%, are called “pigeons”. Members who rather want to see higher rates to reward savings and want to featherlight inflation all the time, are called “hawks” and will not rest until inflation has or is below 2%.
Usually there is a chairman or president who conducts every meeting, must create a consensus between hawks or pigeons and has its last word when it comes down to dividing the votes to avoid a draw 50-50 about whether the current policy should be adapted. The chairman will give speeches that can often be observed live, in which the current cash attitude and perspectives are communicated. The central bank will try to send its monetary policy without causing sudden fluctuations in rates, shares or currency. All members of the Central Bank will direct their position to markets before the politics event. A few days before the political meeting until the modern policy is transferred, the members must not be publicly talked to. This is called a period of blackout.
